Clients are getting more sophisticated about their supply chains and have the data for deep analysis. I presume one could apply the same principles to small business and personal buying and investing but the data aren't there like for larger companies. I would think this could be a new consulting area as companies are going green in droves.

Interesting observation. After presuming business would resist environmentally conscious investing and operations, a group of investors representing $18 trillion (with a "t") in assets to invest just announced they are pressing to go green in a big way. You are correct that, as this trend picks up, the data to support companies looking deep into their supply chains, including all the way back to materials sources, will be increasingly available. As a consulting practice, you are also right that data availability for mid-sized and smaller companies are sparse.

However, this does not mean that you don't have a consulting opening in this area. There are some sources of information that already mine several databases to score the environmental performance of consumer products. Good Guide is available as a model to look at the environmental, health and social performance on close to 100,000 consumer products. They do this by mining a range of databases on health, safety, good governance, regulatory compliance, etc. A product may say it is green but a component (of a component of a component) may be toxic. Good Guide uses a method to make these facts transparent to the buyer.

Tip: There is another reason. The concepts of robust supply chain analysis are increasingly essential for any consultant wanting to look at their client's business the same way the executive does. If your client's CEO is looking closely at five to ten steps up the supply chain, then you should be thinking the same way. You could use this approach as a guide to recommend, depending on how far along your client is, how to more thoroughly vet their supply (or value) chain.

© 2009 Institute of Management Consultants USA

I ran across a recent survey about why clients buy consulting services that I think Daily Tips subscribers would find interesting

The Productivity Institute recently surveyed buyers of consulting services to find out what characteristics were most important in selecting a particular consultant. Unlike the 1970s through 1990s, when technical expertise was the key selection determinant, it seems that some other criteria are moving to the front. Given that 20-30 years ago performance improvement tended to be more about process and today it is more about human capital, it makes sense that consultant selection priorities may have changed

Survey respondents were asked to name the three characteristics they considered most important when hiring consultants. Over half selected as the most important criterion a consultant's communication skills, beating out what we have come to consider most important: being smart and honest. This may cause a bit of disbelief in many of us who pride ourselves on being, above all else, smart and ethical consultants.

The second most important characteristic was the ability to work with others. Having heard from many clients about consultants who came across as aloof or even arrogant, this makes sense. The third characteristic was experience. For over a decade, we have seen the increasing importance of interpersonal skills in helping diagnose, facilitate, discuss, cajole and exhort client staff to improve performance. Knowing the answer does no good if you can't get information from clients and stakeholders, explain your findings, or encourage staff to embrace your recommendations.

Tip: The assessment of your interpersonal skills starts with your first interaction with the client organization. This means being genuinely respectful to staff, learning all you can about the culture (not just digesting the annual report for data), and listening more than you talk when you meet with a prospect. Talk to current or past staff to get a sense of the place. If the prospect did his or her due diligence, you are probably qualified technically to perform. The initial interview is to see if you are in sync with the culture and the client. And this is just the first part. Future tips will address the nuances of consultant communication and how to engage with the culture of the client’s environment.

© 2009 Institute of Management Consultants USA

We are reevaluating our services to a market that is still struggling economically. We are split whether to abandon the market for better prospects or persevere with long term clients who temporarily can't pay.

Does this all come down to loyalty vs. revenue? The answer is easy, but not easy. Easy because you are in the business of providing consulting services to clients to enhance their business. Your are in the advisory business, not the charity business. So what is the problem? Just tell your current clients you wish them well and move on to other clients who can pay. You’ll be available to advise them when the market turns around.

Regrettably, this is the correct strategy for your own business, but only over the short term. However, you have to weigh this against the loyalty effect on your long term profitability and reputation. Your currently struggling clients are not likely to be so forever. They probably need your advice more than ever now. Your skills in pulling them out of the fire in this economy, as well as sticking with them - as a true partner would - will earn you loyalty in return.

Tip: Yes, your partners and you will have to come to a decision that you can all live with. Look at creative ways to restructure compensation such as longer term payments with a modest premium. Alternatively, your clients may be in a position to provide some in-kind services of value to you, such as office space, accounting or printing services, technical support or even temporary staffing. Don’t give up on your customers without trying all you can to stick with those clients who have been loyal to you. That's what partners do for each other.

© 2009 Institute of Management Consultants USADIversify your portfolio - tune up with new sectors and services